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LPL Financial Holdings Inc. (LPLA)
:LPLA
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LPL Financial (LPLA) AI Stock Analysis

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LPLA

LPL Financial

(NASDAQ:LPLA)

Rating:74Outperform
Price Target:
$424.00
â–²(13.20% Upside)
LPL Financial's strong financial performance and strategic acquisitions drive a positive outlook, but high leverage, declining cash flow, and valuation concerns temper the overall score.
Positive Factors
Client Asset Growth
Client asset growth was 28% from strong market gains, industry-leading recruiting, and recent deals.
Earnings
LPL continued its long record of beats, with adjusted EPS driven by lower expenses.
Negative Factors
Client Cash Levels
May's client cash balance is below consensus's estimate for the quarter.
Consensus Expectations
QTD LPL is tracking below consensus expectations for the quarter.

LPL Financial (LPLA) vs. SPDR S&P 500 ETF (SPY)

LPL Financial Business Overview & Revenue Model

Company DescriptionLPL Financial Holdings Inc. (LPLA) is a leading diversified financial services company that provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial institutions across the United States. Founded in 1989 and headquartered in San Diego, California, LPL Financial offers a comprehensive array of financial products, including mutual funds, annuities, equities, fixed income, alternative investments, and insurance products. It supports more than 19,000 financial advisors and approximately 800 financial institutions, helping them serve millions of investors with innovative tools, research, and technology solutions.
How the Company Makes MoneyLPL Financial generates revenue through various streams primarily linked to its brokerage and advisory services. The company earns commissions and fees from the trading and sale of financial products, such as mutual funds, annuities, and insurance products. Additionally, LPL Financial collects asset-based fees for advisory services and manages various investment accounts. Another significant revenue source comes from the interest income generated from client cash balances held in advisory accounts. The firm also benefits from strategic partnerships and alliances with financial institutions, enhancing its product offerings and expanding its client base. Overall, LPL Financial's revenue model heavily relies on the success of its network of independent financial advisors and their ability to attract and manage client assets.

LPL Financial Key Performance Indicators (KPIs)

Any
Any
Net New Assets
Net New Assets
Measures the flow of new client assets, indicating the firm's ability to attract and retain clients, a key driver of future revenue.
Chart InsightsLPL Financial's net new assets experienced significant volatility, with a remarkable spike in Q4 2024. The recent earnings call highlights a record $71 billion in organic net new assets, reflecting a 16% annualized growth rate. This growth is bolstered by strategic acquisitions like Commonwealth Financial Network, despite macroeconomic uncertainties and intense recruiting competition. The company's robust asset retention and strategic initiatives suggest strong momentum, positioning LPL Financial for continued expansion in a challenging environment.
Data provided by:Main Street Data

LPL Financial Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: -5.35%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, including record total assets, significant organic growth, and successful acquisition strategies. However, it also noted challenges such as increased interest expenses, reduced trading volumes, and slower adviser movement due to economic uncertainty. The overall sentiment reflects a positive outlook with some caution due to these challenges.
Q2-2025 Updates
Positive Updates
Record Total Assets
Total assets increased to a record $1.9 trillion, supported by a solid organic growth and higher equity markets.
Strong Organic Growth
Attracted organic net new assets of $21 billion with a 5% annualized growth rate.
Adjusted EPS Increase
Adjusted EPS was $4.51, representing an increase of 16% from a year ago.
High Asset Retention Rate
Overall asset retention remains industry-leading at 98% for the second quarter and over the last 12 months.
Successful Acquisition and Integration
Completed the conversion of Atria Wealth Solutions with an anticipated asset retention of approximately 82%, ahead of the initial target of 80%.
Commonwealth Financial Network Acquisition
On track to close the transaction and achieve a 90% retention target, contributing to $120 million EBITDA initially and $415 million once fully integrated.
Negative Updates
Higher Interest Expense
Interest expense increased by $22 million sequentially due to an April debt issuance.
Reduced Trading Volumes
Transaction revenue was $61 million, down $7 million sequentially due to lower trading volumes.
Slow Adviser Movement
Adviser movement slowed, with expected organic growth in July to be around 4%, partly due to macroeconomic uncertainty.
Challenges with Misaligned OSJs
Expected attrition from misaligned OSJs with $7 billion more departures anticipated.
Company Guidance
During the second quarter of fiscal year 2025, LPL Financial Holdings Inc. reported a robust financial performance, with total assets reaching a record $1.9 trillion, supported by organic net new assets of $21 billion, reflecting a 5% annualized growth rate. The company achieved an adjusted EPS of $4.51, marking a 16% increase from the previous year, and maintained an industry-leading asset retention rate of 98%. Recruitment efforts resulted in $18 billion in new assets for the quarter, contributing to a total of $161 billion over the trailing 12 months. LPL completed the conversion of Atria Wealth Solutions, expecting asset retention at approximately 82%, and anticipated the closing of the Commonwealth Financial Network acquisition. The firm's core G&A expenses were lowered to an annual outlook of $1.880 billion to $1.920 billion, factoring in efficiencies and the integration of recent acquisitions. Overall, LPL demonstrated strong execution in both organic and inorganic growth strategies, further solidifying its position in wealth management.

LPL Financial Financial Statement Overview

Summary
LPL Financial demonstrates strong revenue growth and profitability, supported by a robust balance sheet with no debt and increasing equity. However, cash flow metrics suggest potential liquidity challenges due to increased capital expenditures. Attention to cash flow management will be crucial to sustaining long-term financial health.
Income Statement
85
Very Positive
LPL Financial has shown impressive revenue growth over the years, with a significant increase from $2.35 billion in 2021 to $12.39 billion in 2024. Gross profit margin stands strong at 90.0% for 2024, indicating efficient cost management. However, the net profit margin slightly decreased from 10.6% in 2023 to 8.5% in 2024, suggesting increased expenses or cost pressures impacting net profitability. Overall, the income statement reveals robust growth and solid profitability metrics.
Balance Sheet
78
Positive
The balance sheet shows a healthy improvement in equity, with stockholders' equity rising from $2.08 billion in 2023 to $2.93 billion in 2024. The debt-to-equity ratio improved significantly as total debt was eliminated by 2024. ROE is strong at 36.1% for 2024, reflecting effective utilization of equity in generating profits. The equity ratio at 22.0% indicates a moderate reliance on equity financing. Overall, the balance sheet is stable with a strong equity position and reduced debt levels.
Cash Flow
70
Positive
Cash flow analysis reveals a concerning decline in free cash flow from $109.3 million in 2023 to -$284.9 million in 2024, primarily due to a significant increase in capital expenditures. The operating cash flow to net income ratio decreased as well, indicating less cash generation relative to earnings. Despite these challenges, the company has effectively managed operating cash flows historically. Overall, the cash flow situation shows potential strain due to high capital investments.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue13.22B12.39B10.05B3.06B2.35B2.00B
Gross Profit6.08B3.37B3.05B1.95B1.35B1.10B
EBITDA2.40B2.11B1.99B1.53B832.02M908.93M
Net Income1.09B1.06B1.07B845.70M459.87M472.64M
Balance Sheet
Total Assets13.96B13.32B10.39B9.48B7.99B6.52B
Cash, Cash Equivalents and Short-Term Investments1.35B1.01B541.76M847.52M495.25M808.61M
Total Debt5.96B5.75B3.96B2.72B2.81B2.59B
Total Liabilities10.84B10.39B8.31B7.31B6.32B5.21B
Stockholders Equity3.12B2.93B2.08B2.17B1.67B1.31B
Cash Flow
Free Cash Flow-369.48M-284.94M109.33M1.64B237.15M634.41M
Operating Cash Flow191.50M277.59M512.61M1.95B453.13M789.94M
Investing Cash Flow-1.66B-1.59B-860.19M-376.40M-458.64M-187.50M
Financing Cash Flow1.50B1.42B-208.53M-504.27M278.84M-275.19M

LPL Financial Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price374.57
Price Trends
50DMA
378.25
Negative
100DMA
354.96
Positive
200DMA
341.48
Positive
Market Momentum
MACD
1.52
Positive
RSI
47.02
Neutral
STOCH
36.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LPLA, the sentiment is Neutral. The current price of 374.57 is below the 20-day moving average (MA) of 379.49, below the 50-day MA of 378.25, and above the 200-day MA of 341.48, indicating a neutral trend. The MACD of 1.52 indicates Positive momentum. The RSI at 47.02 is Neutral, neither overbought nor oversold. The STOCH value of 36.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LPLA.

LPL Financial Risk Analysis

LPL Financial disclosed 32 risk factors in its most recent earnings report. LPL Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

LPL Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$33.62B16.3518.22%1.20%9.01%14.86%
75
Outperform
$33.23B54.179.51%0.32%27.97%28.39%
75
Outperform
$11.53B21.6911.11%1.58%8.75%10.32%
74
Outperform
$29.92B25.5829.46%0.32%29.23%13.45%
68
Neutral
$7.79B36.3716.42%1.44%7.68%-14.39%
68
Neutral
$11.90B21.875.75%2.68%1.00%46.98%
67
Neutral
Â¥764.30B11.157.42%3.20%7.66%14.08%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LPLA
LPL Financial
373.94
176.54
89.43%
JEF
Jefferies
57.69
3.69
6.83%
MKTX
Marketaxess Holdings
207.81
-21.01
-9.18%
RJF
Raymond James Financial
166.62
59.20
55.11%
SF
Stifel Financial
112.20
32.38
40.57%
TW
Tradeweb Markets
140.54
27.63
24.47%

LPL Financial Corporate Events

M&A TransactionsBusiness Operations and Strategy
LPL Financial Completes Acquisition of Commonwealth Financial
Positive
Aug 1, 2025

On August 1, 2025, LPL Financial Holdings Inc. completed its acquisition of Commonwealth Financial Network, a wealth management firm with around 3,000 advisors managing $305 billion in assets. This acquisition, initially announced on March 31, 2025, is expected to enhance LPL’s service offerings and market position by integrating Commonwealth’s premium service culture and award-winning advisor experience. Commonwealth will continue to operate as a wholly-owned portfolio company, with its CEO Wayne Bloom joining LPL’s management committee. The onboarding of Commonwealth advisors to LPL’s platform is anticipated to be completed by the fourth quarter of 2026.

The most recent analyst rating on (LPLA) stock is a Buy with a $397.00 price target. To see the full list of analyst forecasts on LPL Financial stock, see the LPLA Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
LPL Financial Signs Consulting Agreement with Althea Brown
Neutral
Jul 3, 2025

On May 3, 2025, Althea Brown resigned as the Chief Legal Officer and Corporate Secretary of LPL Financial Holdings Inc. Subsequently, on July 2, 2025, the company entered into a Consulting Agreement with her to assist in the transition of her responsibilities until September 20, 2025. The agreement waives her obligation to repay approximately $270,000 related to her sign-on bonus and relocation expenses, and allows her restricted stock units to continue vesting. This move ensures a smooth transition and maintains stability within the company’s legal operations.

The most recent analyst rating on (LPLA) stock is a Buy with a $397.00 price target. To see the full list of analyst forecasts on LPL Financial stock, see the LPLA Stock Forecast page.

Executive/Board Changes
LPL Financial’s Chief Legal Officer Resigns
Neutral
Jun 3, 2025

On May 30, 2025, Althea Brown announced her resignation as the Chief Legal Officer and Corporate Secretary of LPL Financial Holdings Inc., effective June 30, 2025. After 28 years in executive roles, she plans to take a career break. Ms. Brown will assist in developing a transition plan as the company searches for her successor, potentially impacting the company’s legal and corporate governance operations.

The most recent analyst rating on (LPLA) stock is a Buy with a $397.00 price target. To see the full list of analyst forecasts on LPL Financial stock, see the LPLA Stock Forecast page.

Executive/Board ChangesShareholder Meetings
LPL Financial Stockholders Approve Key Proposals at Annual Meeting
Neutral
May 23, 2025

On May 22, 2025, LPL Financial held its annual meeting of stockholders where several key proposals were voted on. The stockholders elected ten nominees to serve as directors until the 2026 annual meeting, ratified Deloitte & Touche LLP as the independent registered public accounting firm for the current fiscal year, and approved the executive compensation on an advisory basis.

The most recent analyst rating on (LPLA) stock is a Buy with a $405.00 price target. To see the full list of analyst forecasts on LPL Financial stock, see the LPLA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 07, 2025